Ethanol Reforms Announced

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President Trump announced on Tuesday that his Administration will begin rulemaking to expand the use of ethanol while reforming the Renewable Fuel Standard (RFS). The announcement, which comes after months of dialogue between the pro-ethanol community and organizations representing refineries and oil companies, means that EPA Acting Administrator Andrew Wheeler will likely begin two phases of rulemaking. The first phase would be to change to the Reid Vapor Pressure waiver necessary for summer E15 sales (currently, E15 can’t be sold year-round).

The second phase would bring more transparency to the RFS’s Renewable identification Number (RIN) trading market, which is viewed by some as an olive branch to refiners. Organizations representing the ethanol industry welcomed the announcement while those representing the refineries and oil/natural gas companies pledged to challenge the legality of EPA’s potential rulemaking. In theory, the expansion of E15 fuel at gas pumps will increase the demand for corn by the ethanol industry; thus, it would increase the price of corn.

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